Vetiva Forecasts Average Brent Price of $105/barrel

Kayode Tokede

Analysts at Vetiva Research have predicted an average Brent price of $105 per barrel for 2022 full year.

The analysts in a second half (H2 2022) outlook report titled “A strange labyrinth”, disclosed that the projection for Brent price is supported by continuous recoveries in global oil demand as well as slower supply growth from Organization of the Petroleum Exporting Countries (OPEC) amid production hitches from its members.

The Oil & Gas analyst at Vetiva, Victoria Ejugwu stated that, “The oil market may continue to face tightness given low supply prospects and soaring demand; as such, prices are expected to remain elevated”.

She, however, noted that a significant downside risk to oil prices remains the possible re-emergence of the virus.

According to  her, “The virus is here to stay with us, with new variants springing up from time to time. We saw what happened with China in Q2, with the virus putting Shanghai on lockdown. Despite vaccination efforts, re-infections could stem lockdowns and movement restrictions. This remains a downside risk for oil prices, as movement and travel restrictions could stifle demand”.

Victoria also noted that although OPEC has consistently eased production cuts, Nigeria’s crude output has however remained below agreed quotas.

She asserted, “Despite the fact that OPEC has been unwinding production caps, Nigeria’s crude output has fallen below expectation. This has been due to some operational problems, as well as issues stemming from insecurity.